Amendment to ITR Forms and applicability

The ministry of finance has released Income-tax (Second Amendment) Rules, 2019 which come into force on April 1, 2019 and thereby amended the income tax rules, 1962. Along with some minor changes made in some of the clauses, the amendment also prescribes substitutes for the annual return forms: Form Sahaj (ITR-1), Form ITR-2, Form ITR-3, Form Sugam (ITR-4), Form ITR-5, Form ITR-6, Form ITR-7 and Form ITR-V.

The following replacements for the forms have been stipulated:

1) For individuals who are residents and have a total income up to Rs.50 lakh, have Income from Salaries, one house property, and agricultural income up to Rs.5 thousand have to fill Form Sahaj (ITR-1). This form is not to be filled by individuals who are either claiming deduction for family pension, or Directors in a company or have invested in unlisted equity shares. The individual is required to disclose his/her gross total income deductions and taxable total income (as per income-tax act computation of tax payable).

2) Form ITR-2 is the form which is to be filled by individuals and Hindu Undivided Families (HUFs) who do not have income from profits and gains of a business or profession. Details of Income from Salary, Income From House Property, Capital Gains, Income from other sources and Details of Income after Set off of current year losses are required to be provided by the persons and the HUFs through this form.

3) For individuals and Hindu Undivided Families who secure their income from profits and gains of a business or profession are to fill Form ITR-3 (in reference to the rule 12 of the Income-tax Rules,1962). The individuals are
necessitated to disclose the nature of business or profession, balance sheet
as on 31st day of March, 2019 of the proprietary, business or profession and
details of the manufacturing , trading and profit and loss account.

4) Form Sugam (ITR-4) is for Individuals, Hindu Undivided Families who is a resident other than not ordinarily resident, or a firm, other than limited liability partnership firm, which is a resident having total income upto Rs.50 lakh and having income from business and profession which is computed under sections 44AD, 44ADA or 44AE. This form shall not be filed by a person who is a director in any company; or has held any unlisted equity share at any time during the previous year; or has total income, exceeding fifty lakh rupees; or owns more than one house property, the income of which is chargeable under the head “Income from house property”; or has any brought forward loss or loss to be carried forward under any head of income; or is assessable for the whole or any part of the income on which tax has been deducted at source in the hands of a person other than the assessee”

5) Form ITR-5 is for persons other than individual, HUF, company or a person filing Form ITR-7. It requires the person filling the form to provide information details of the balance sheet (as on 31st day of March, 2019 or date of dissolution) and the manufacturing , trading and profit and loss accounts for the financial year 2018-19.

6) Companies other than companies claiming exemption under section 11 are required to fill Form ITR-6 and disclose the details regarding the shareholders information, ownership information, nature of company and its business.

7) Form ITR-7 is to be filled by persons including companies required to furnish returns under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) only and requires the person to fill in the information regarding of the auditing of the company accounts and the member’s information.

The schedules to the return form are available in Form ITR-2, Form ITR-3, Form ITR-5, Form ITR-6, Form ITR-7and the verification clause in Form Sahaj (ITR-1), Form ITR-2, Form ITR-4 SUGAM, Form ITR-3, Form ITR-5, Form ITR-6 and Form ITR-7.

Click here for the amendment.